Public Consultation on the Provisional Implementation Plan for Ensuring the Consumption of Renewable Energy Power in Sichuan Province

The Sichuan Provincial Energy Administration has issued a notice soliciting comments on the “Provisional Implementation Plan for Ensuring the Consumption of Renewable Energy Power in Sichuan Province (Draft for Comments).” Please submit your written feedback by December 2; failure to respond by the deadline will be deemed as no objection.

The plan states that the allocation of responsibility‑sharing weights for each market entity tasked with fulfilling its consumption obligations is as follows:

1. Provincial grid enterprises and provincially‑owned (including locally‑managed) distribution grid enterprises shall assume the corresponding renewable energy consumption obligation weights based on their annual electricity sales volume, with a minimum aggregate consumption obligation weight of 80% for 2020 and a minimum non‑hydropower consumption obligation weight of 6%.

2. Other market entities, including all types of enterprises that directly supply (or sell) electricity to end‑users, independent power retailers, power retailers with distribution‑network operation rights, and electricity users who procure electricity through the power market (excluding those who purchase electricity via a retail intermediary), shall, in accordance with the national renewable energy consumption obligation targets allocated to their respective provinces, assume responsibility for meeting the corresponding share of renewable energy consumption based on their annual electricity supply (or sales, or usage) volumes.

3. Enterprises with their own captive power plants shall assume the corresponding consumption‑responsibility weight based on their annual electricity consumption, with a minimum total‑consumption responsibility weight of 80% and a minimum non‑hydropower consumption‑responsibility weight of 6% for 2020.

Details are as follows:

Letter from the Sichuan Provincial Energy Administration Soliciting Comments on the “Provisional Implementation Plan for Ensuring the Consumption of Renewable Energy Power in Sichuan Province (Draft for Public Comment)”

To all relevant units:

In accordance with the spirit of the “Notice of the National Development and Reform Commission and the National Energy Administration on Establishing and Improving the Mechanism for Ensuring the Consumption of Renewable Energy Power” (NDRC Energy [2019] No. 807), the “Notice of the General Office of the National Development and Reform Commission and the Comprehensive Department of the National Energy Administration on Issuing the Outline for Preparing Provincial-Level Implementation Plans for Ensuring the Consumption of Renewable Energy Power” (NDRC Energy [2020] No. 181), and the “Notice of the National Development and Reform Commission and the National Energy Administration on Issuing the 2020 Responsibility Weight Targets for the Consumption of Renewable Energy Power in Each Provincial Administrative Region” (NDRC Energy [2020] No. 767), and in order to effectively implement the responsibility weight targets for renewable energy power consumption in our province, the Provincial Energy Administration, in collaboration with relevant departments and units, has drafted the “Sichuan Province Implementation Plan for Ensuring the Consumption of Renewable Energy Power (Provisional) (Draft for Comments).” We now seek your organization’s views. Please submit your written comments and suggestions to our bureau by December 2; failure to respond by the deadline will be deemed as no objection.

Contact person and phone number: Gao Liang, 028-86705615

Electricity email: 429764491@qq.com

Attachment: Sichuan Province Implementation Plan for Ensuring the Consumption of Renewable Energy Power (Provisional) (Draft for Public Comment)

Sichuan Provincial Energy Administration

November 23, 2020

Implementation Plan for Ensuring the Consumption of Renewable Energy Power in Sichuan Province

(Provisional) (Draft for Public Comment)

In accordance with the requirements set forth in documents such as the “Notice of the National Development and Reform Commission and the National Energy Administration on Establishing and Improving the Mechanism for Ensuring the Consumption of Renewable Energy Power” (NDRC Energy [2019] No. 807) and the “Notice of the Comprehensive Department of the National Development and Reform Commission and the National Energy Administration on Issuing the 2020 Renewable Energy Power Consumption Responsibility Weights for Each Provincial Administrative Region” (NDRC Energy [2020] No. 767), and in order to effectively implement the renewable energy power consumption responsibility weights in our province, this Implementation Plan has been formulated in light of actual conditions.

I. Guiding Principles and Overall Requirements

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will comprehensively implement the spirit of the 19th National Congress of the Communist Party of China and the Second, Third, and Fourth Plenary Sessions of the 19th CPC Central Committee. We will earnestly put into practice General Secretary Xi Jinping’s series of important instructions on Sichuan’s work and the new energy security strategy of “Four Revolutions and One Cooperation,” so as to enable Sichuan to fulfill its role as a national high-quality clean energy base and a model province for clean energy. We will promote the prioritized integration of renewable energy into the grid, ensure that Sichuan meets the annual minimum targets for renewable energy consumption set by the state—both for total renewable electricity and for non-hydro renewable electricity—and achieve the sustained, healthy development of renewable energy.

II. Implementation Mechanism for Consumption and Absorption Guarantees

(1) In accordance with the nationally defined renewable energy consumption obligations, the Provincial Energy Administration shall specify the minimum renewable energy electricity consumption obligation ratios (hereinafter referred to as “minimum consumption obligation ratios”) for all market entities within the province that are subject to such obligations. These include the overall renewable energy electricity consumption obligation ratio (hereinafter referred to as “overall consumption obligation ratio”) and the non‑hydropower renewable energy electricity consumption obligation ratio (hereinafter referred to as “non‑hydropower consumption obligation ratio”). The Provincial Energy Administration, in coordination with relevant provincial departments, shall assess the fulfillment of these obligations by market entities, urge those failing to meet their obligations to take corrective measures, and impose sanctions in accordance with applicable laws and regulations.

(2) Each market entity bearing renewable energy consumption obligations shall, in accordance with this Implementation Plan, register an account with the Sichuan Electric Power Trading Center and proactively fulfill its assigned consumption targets. Market entities that meet the relevant conditions are encouraged to voluntarily exceed the prescribed minimum consumption obligation; the energy consumption corresponding to any excess fulfillment shall not be counted toward energy‑consumption assessments.

(3) Within the province, State Grid‑affiliated provincial grid enterprises (hereinafter referred to as “provincial grid enterprises”) and provincially‑owned local grid enterprises shall, in accordance with this Implementation Plan for Power Consumption, formulate their own “Detailed Rules for Implementing the Power Consumption Responsibility Weight” (hereinafter referred to as the “Detailed Rules”), and shall be responsible for organizing the markets within their respective operating areas that are tasked with fulfilling the power consumption obligations.

The entities shall fulfill their respective renewable energy consumption obligations.

(4) The Provincial Energy Administration has authorized the Sichuan Electricity Trading Center to manage information on market entities within the province that are obligated to fulfill renewable energy consumption obligations. In accordance with this authorization, the Sichuan Electricity Trading Center is responsible for managing account deregistration, calculating and transferring renewable energy consumption volumes for such market entities, and submitting reports to the Provincial Energy Administration, the Provincial Department of Economy and Information Technology, and the Sichuan Regulatory Office of the National Energy Administration on the progress of fulfilling these obligations, along with relevant analysis and assessments.

III. Consumption Obligation Weights and Allocation (Can Be Simplified)

(1) Each year, the Provincial Energy Administration, based on the national annual renewable energy consumption obligation targets allocated to the province, shall specify the annual consumption obligation targets for each market entity. For the province, the minimum overall consumption obligation target for 2020 is 80%, and the minimum non-hydro consumption obligation target is 6%.

(2) Among the sales and consumption volumes of each market entity bearing the consumption‑guarantee obligation, agricultural electricity and heating electricity subject to dedicated metering are exempt from the consumption‑guarantee‑weight assessment. Furthermore, all market entities with such obligations shall jointly assume the consumption‑guarantee volume corresponding to transmission and distribution losses and plant‑use electricity within Sichuan Province.

(3) The schemes for allocating the renewable energy consumption obligation weights to each market entity bearing such obligations are as follows:

1. Provincial grid enterprises and provincially‑owned (including locally‑managed) distribution grid enterprises shall assume the corresponding renewable energy consumption obligation weights based on their annual electricity sales volume, with a minimum aggregate consumption obligation weight of 80% for 2020 and a minimum non‑hydropower consumption obligation weight of 6%.

2. Other market entities, including all types of enterprises that directly supply (or sell) electricity to end‑users, independent power retailers, power retailers with distribution‑network operation rights, and electricity users who procure electricity through the power market (excluding those who purchase electricity via a retail intermediary), shall, in accordance with the national renewable energy consumption obligation targets allocated to their respective provinces, assume responsibility for meeting the corresponding share of renewable energy consumption based on their annual electricity supply (or sales, or usage) volumes.

3. Enterprises with their own captive power plants shall assume the corresponding consumption‑responsibility weight based on their annual electricity consumption, with a minimum total‑consumption responsibility weight of 80% and a minimum non‑hydropower consumption‑responsibility weight of 6% for 2020.

IV. Market Entity Management Mechanism

(1) All market entities subject to the consumption‑and‑integration responsibility shall, prior to the official commencement of the annual assessment period, complete account registration or deregistration with the Sichuan Electric Power Trading Center. The Sichuan Electric Power Trading Center shall submit to the Provincial Energy Administration a list of market entities in Sichuan Province that are obligated to fulfill the consumption‑and‑integration responsibility for the current year.

(2) Each market entity bearing renewable energy consumption obligations shall, on an annual basis, formulate a “Renewable Energy Power Consumption Plan,” specifying its requirements for fulfilling the consumption targets and outlining preliminary arrangements, and submit such plan to the grid enterprise serving its operating area, the Provincial Energy Administration, the Provincial Department of Economy and Information Technology, the Sichuan Regulatory Office of the National Energy Administration, and the electricity trading institution. Enterprises with self‑owned power plants that are not connected to the public grid shall, likewise, prepare an annual “Renewable Energy Power Consumption Plan” and submit it to the Provincial Energy Administration, the Provincial Department of Economy and Information Technology, the Sichuan Electricity Trading Center, and the Sichuan Regulatory Office of the National Energy Administration. The Sichuan Electricity Trading Center shall consolidate the consumption plans submitted by all market entities.

(3) Reporting, statistical analysis, and evaluation of renewable energy consumption. The Sichuan Electricity Trading Center compiles, on a monthly basis, the progress of each market participant in meeting their renewable energy consumption obligation targets, and submits quarterly reports to the Provincial Energy Administration, the Provincial Department of Economy and Information Technology, and the Sichuan Regulatory Office of the National Energy Administration, detailing the status of compliance with these obligations as well as related analyses and assessments.

V. Fulfillment of Renewable Energy Consumption Obligation Weights

(1) Main fulfillment method: Purchasing or self‑consumption of renewable energy electricity. Each market entity bearing the renewable energy consumption obligation shall fulfill its target by actually consuming a specified amount of renewable energy (hereinafter referred to as “consumption volume”).

(2) Supplementary methods of performance.

1. Purchase the excess renewable energy consumption quota from other market entities, with the parties independently determining the transaction or transfer price.

2. Purchase green electricity certificates for renewable energy; the corresponding amount of renewable energy represented by these certificates shall be counted as consumed.

(3) Calculation of the Absorption Volume

1. Renewable energy electricity purchased from the market.

(1) For renewable energy electricity purchased on a full‑guarantee basis by provincial grid enterprises and provincially‑owned (in‑province) local grid enterprises, the allocated quantities shall be distributed among market entities within the operating area according to their respective responsibility weights, with the allocated amounts counted as each entity’s consumption obligation.

(2) For renewable energy electricity traded in the provincial electricity market, the volume settled through such transactions shall be counted as the consumption obligation of the market participant.

2. Renewable energy electricity consumed on-site.

The self‑generated and self‑consumed electricity measured by the grid enterprise, or as approved by the Provincial Energy Administration, the Provincial Department of Economy and Information Technology, or the Sichuan Regulatory Office of the National Energy Administration, shall be fully counted toward the consumption volume of the self‑generation and self‑consumption market entity.

3. Supplement (or substitute) methods for fulfilling the consumption quota.

The consumption volume purchased from other market entities that are not grid‑operating companies, or the consumption volume converted from green certificates, shall be counted toward the purchaser’s own consumption obligations. Consumption volumes sold or already transferred by market entities bearing consumption obligations, as well as the consumption volumes corresponding to green certificates that have been sold, shall no longer be included in those entities’ consumption obligations. In accordance with the principle of equal rights and responsibilities, the consumption volume attributable to agricultural electricity use or to heating electricity subject to dedicated metering—where such entities are exempt from the consumption‑obligation weighting assessment—may not be used for trading or transfer.

(4) Allocation of the consumption capacity corresponding to the full‑guarantee purchase of renewable energy generation. First, this capacity shall be used to fulfill the consumption‑responsibility targets for residential, agricultural, essential public‑utility and public‑service electricity consumption, as well as non‑market‑based electricity use within the operating area. Any remaining capacity shall be allocated by provincial grid enterprises and provincially‑owned (or locally‑controlled) distribution grid enterprises to market participants within their respective operating areas—excluding entities with self‑owned power plants that are not connected to the public grid and independent grid operators—on the basis of their purchased or consumed electricity volumes. Initially, such allocation will be carried out on a gratuitous basis; subsequently, adjustments will be made in line with the progress of electricity market reforms.

VI. Division of Tasks

(1) The Provincial Energy Administration shall assume responsibility for the allocation and implementation of the province’s renewable energy consumption obligation targets, clearly define the specific obligations of each market entity subject to these targets, and conduct performance assessments. In coordination with the Provincial Department of Economy and Information Technology, it shall urge provincial (and locally‑owned) grid enterprises, power distribution and sales companies, as well as enterprises operating captive power plants that are not connected to the public grid, to complete account registration at the Sichuan Electricity Trading Center on time and to submit relevant data, including progress reports on the fulfillment of their renewable energy consumption obligations.

(2) Provincial grid enterprises and provincially‑owned (including locally‑managed) grid enterprises shall, in accordance with this Implementation Plan for Renewable Energy Consumption, organize the market entities within their respective operating areas that are assigned renewable energy consumption obligations to fulfill their renewable energy consumption responsibility targets. Such enterprises shall also formulate “Detailed Rules for Implementing Renewable Energy Consumption Responsibility Weights,” submit them to the Provincial Energy Administration for approval, and implement them upon approval.

(3) By the end of January each year, provincial grid enterprises and provincially‑owned (in‑province) local grid enterprises shall submit to the Provincial Energy Administration, the Provincial Department of Economy and Information Technology, and the Sichuan Regulatory Office of the National Energy Administration a report on the implementation status of their respective operational areas’ renewable energy consumption obligation targets for the preceding year.

(4) In cases where renewable energy generation is significantly reduced or transmission capacity is constrained due to natural causes, major accidents, or other force majeure events, the National Energy Administration shall correspondingly adjust downward the corresponding consumption‑responsibility weights. The provincial energy administration shall, based on the nationally adjusted consumption‑responsibility weights, conduct performance assessments of market entities.

(5) The Sichuan Electricity Trading Center is responsible for organizing and conducting electricity trading related to renewable energy within the province, guiding market participants in electricity trading to prioritize fulfilling their obligations under the renewable energy consumption responsibility quota, and providing reminders to relevant market participants during the review of medium- and long-term electricity trading contracts and the public disclosure of trading information.

(6) The Sichuan Electricity Trading Center is responsible for organizing the trading or transfer of consumption capacity within the province and for formulating the detailed rules governing such transactions or transfers.

(7) The Sichuan Electricity Trading Center shall, on a quarterly basis, submit to the Provincial Energy Administration, the Provincial Department of Economy and Information Technology, and the Sichuan Regulatory Office of the National Energy Administration reports on the progress of each market entity in fulfilling its renewable energy consumption obligation targets. In addition, by the end of January each year, it shall submit a report on the fulfillment of these obligations for the preceding year.

(8) Each market entity bearing renewable energy consumption obligations shall fulfill the renewable energy power consumption obligation quota allocated by the Provincial Energy Administration and submit a commitment to the Sichuan Electricity Trading Center regarding the fulfillment of such obligations. Local grid enterprises, distribution and retail electricity companies, and enterprises with self‑owned power plants that are not connected to the public grid shall, within three working days at the beginning of each month, report their progress in meeting the consumption obligation quota to the Sichuan Electricity Trading Center and certify the authenticity and accuracy of the data provided.

(9) The Sichuan Regulatory Office of the National Energy Administration is responsible for supervising the fulfillment of renewable energy consumption obligations by market entities in the province, as well as the conduct of renewable energy‑related transactions.

VII. Safeguard Measures

(1) The Provincial Energy Administration, in conjunction with the Provincial Department of Economy and Information Technology, shall assess and publicly disclose the annual compliance status of each market entity bearing renewable energy consumption obligations.

(2) The Provincial Energy Administration, in coordination with the Provincial Department of Economy and Information Technology and the Sichuan Supervisory Office of the National Energy Administration, shall oversee market entities that have failed to meet their renewable energy consumption obligations, requiring them to rectify within a specified timeframe and imposing penalties in accordance with laws and regulations. For enterprises operating captive power plants that refuse to fulfill their renewable energy consumption obligations, appropriate punitive measures shall be formulated and implemented.

(3) Grid enterprises, power distribution and sales companies, and enterprises with self‑owned power plants that are not connected to the public grid shall be responsible for the authenticity of the data they submit to the Sichuan Electricity Trading Center. In the event of any falsification, once verified, the Provincial Energy Administration, in coordination with the Provincial Department of Economy and Information Technology and the Sichuan Regulatory Office of the National Energy Administration, shall impose penalties in accordance with applicable regulations.

(4) Other safeguard measures shall be formulated by the Provincial Energy Administration in light of actual conditions.

(5) This plan shall be implemented on a provisional basis for a period of two years, commencing from the date of its issuance.